Mid-Morning Look: October 28, 2024

Mid-Morning Look

Monday, October 28, 2024

Index

Up/Down

%

Last

DJ Industrials

297.56

0.71%

42,412

S&P 500

29.52

0.51%

5,837

Nasdaq

124.71

0.67%

18,642

Russell 2000

31.02

1.40%

2,238

 

 

U.S. stocks off to a strong start this week, as the Nasdaq looks to make it an 8th straight week of gains with big earnings results from Apple, Amazon, Microsoft, Meta, Alphabet all expected to report this week. Ahead of the earnings barrage and key economic data this week (lots of jobs data as well as PCE inflation data), the big news story today was the plunge in oil futures overnight, falling over 6% after widely anticipated Israeli airstrikes against Iran did not hit crucial oil facilities. Oil futures rose last week on worries that the impending Israeli attack, in retaliation for an Iranian missile barrage against Israel on Oct. 1, would target Iran’s oil facilities and potentially spark a wider war in the Middle East. Saturday’s strikes by Israeli jets and missiles instead targeted Iranian air-defense sites and military infrastructure. The move in oil has pressured energy stocks early, while providing a tailwind to shares of airlines, truckers, and cruise lines. Heavy week of economic data as Tuesday brings a consumer-confidence survey and JOLTs job-openings data and Wednesday a look at third-quarter GDP. On Thursday, Personal-consumption expenditures inflation data, and the October jobs report lands Friday morning. The presidential race appears to remain tight a week before Election Day, with bond traders focused on the candidates’ spending and tax plans. Heading into the Fed’s next rate decision on Nov. 7, traders are increasingly confident in a quarter-point cut. The 10-year yield trades at 4.252% and the 2-year at 4.108%. Note the technology heavy Nasdaq is up 7 straight weeks and up 8 of the last 9 trading days into key earnings this week, while the S&P snapped its 6-week win streak last Friday.

 

 

Macro

Up/Down

Last

WTI Crude

-3.90

67.88

Brent

-3.76

72.29

Gold

1.000

2,755.60

EUR/USD

0.0023

1.0816

JPY/USD

0.67

152.97

10-Year Note

0.018

4.256%

 

Sector Movers Today

  • Oil prices tumbled after widely anticipated Israeli airstrikes against Iran did not hit crucial oil facilities. The reaction was a sharp pullback in oil prices, weighing on energy stocks while providing a tailwind for transportation stocks amid the drop in prices (cruise lines, truckers, airlines leading).
  • In Computer Storage & Hardware: CDW was downgraded to Neutral (from OW) at JP Morgan and lower PT to $235 from $260 saying shares are likely to find it challenging to justify the premium valuation that the shares have traded at in recent years given the continued headwind from sluggish Enterprise spending and the limited levers that the company has been able to use to offset the headwinds to EPS growth. NTNX upgraded to Overweight from Equal Weight at Morgan Stanley saying share setup looks attractive as Nutanix positions itself to capture a portion of VMware’s greater than $5B hypervisor business.
  • In Medical devices: PHG shares slumped as the medical device maker cut its 2024 sales guidance to grow by 0.5%-1.5%, down from prior view 3%-5% due to weak demand in China. PHG also reported weaker than expected Q3 sales, down 0.5% YoY vs consensus estimate for 2.1% growth; order intake falls 2% vs 9% growth in Q2. PRCT beat expectations with a narrowed third-quarter loss and lifted its outlook for 2024.

 

Stock GAINERS

  • BYON +11%; as executive chairman Marcus Lemonis discloses purchase of ~157k shares in filing.
  • EVOK +78%; after saying Gimoti, its nasal spray version of drug metoclopramide, when given to patients on GLP-1 weight loss treatments showed better reduction in symptoms compared to the oral version of metoclopramide.
  • GLUE +68%; after saying it has entered into an exclusive agreement with NVS to advance its medicines for immune-mediated conditions. Novartis agreed to pay Monte Rosa $150 million up front. Monte Rosa is eligible to receive up to $2.1 billion in development, regulatory, and sales milestones.
  • HE +3%; after per regulatory filing late Friday, Citadel’s Griffin owns ~8.9M shares for ~5.4% passive stake.
  • IREN +14%; strength in Bitcoin miners CLXS, CORZ, HUT, HIVE, MARA, RIOT as well as COIN after Bitcoin prices jumped over 3% to $68,900 with stock markets rising as well.
  • PRCT +25%; beat expectations with a narrowed third-quarter loss and lifted its outlook for 2024.
  • RBLX +2%; added to Wedbush “best ideas” list saying it expects the co’s revenue growth to outpace the industry for the next three years on continued traffic growth, growth in advertising and potential for adding recurring revenues.
  • RCL +2%; shares advanced along with CCL, NCLH, VIK following the 6% drop in oil prices overnight.
  • UAL +2%; climbing with other airline stocks AAL, DAL, JBLU, LUV, ALK, which are getting a boost as a drop in crude prices signaled a potential impact on jet fuel costs.

 

Stock LAGGARDS

  • ADT -6%; announced a proposed secondary public offering of 56M shares of the company’s common stock held by certain entities managed by affiliates of Apollo Global Management.
  • APA -3%; falling with other energy stocks BP, XOM, COP, SLB, amid a drop in Brent crude
  • BA -1%; launched a widely anticipated capital raise to bolster its reserves amid a prolonged strike saying it plans to announce concurrent offerings of 90 mln shares and $5 bln mandatory convertible.
  • PHG -16%; cut its 2024 sales guidance to grow by 0.5%-1.5%, down from prior view 3%-5% due to weak demand in China. PHG also reported weaker than expected Q3 sales, down 0.5% YoY vs consensus estimate for 2.1% growth; order intake falls 2% vs 9% growth in Q2 9shares of GEHC fall in sympathy).
  • REAL -7%; as issues upbeat guidance but notes CEO departs.
  • UNG -7%; as natural gas prices underperform in the energy complex.

_________________________________________________________________

Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.